Business News of 2013-12-11

‘Sue Merchant Bank directors’

A group calling itself Inside Ghana has blamed the management and board of Merchant Bank Ghana (MBG) for the bank’s indebtedness, which has resulted in the sale of the financial institution to Fortiz Private Equity Fund Ltd.

According to the civil society organization, the board directors of the bank, led by Marian Barnor, mismanaged the funds of the bank resulting in the accumulated debt.

Speaking at a press conference in Accra, George Spencer Quaye, Convener, Inside Ghana said the sale of Merchant Bank was imperative, as the bank had recorded losses since 2012.

Mr Spencer Quaye said “the blame, we believe, must be placed at the doorstep of the leadership of the bank.

Mr Quaye called on Social Security and National Investment Trust (SSNIT) and its management to launch investigations into the activities of the Marian Barnor-led administration.

“The ineffectual leadership of the bank must not go unpunished,” he added.

Mr Quaye said the board of directors should be sued for allegations of wrongful acts, financial mismanagement and errors in judgment and negligence.

Explaining why the board of directors should be blamed for the accumulated debt, Spencer Quaye said the group’s investigations revealed that the Board Directors of MBG spent GH¢1 million in refurbishing the Adabraka branch to enhance its core business of trade finance but never opened it.

He said they stopped the over US$300 million line of credit arranged for the bank by the then management and put a hold to visa application which would have made Merchant Bank compete with international banks.

Mr Quaye added that the board paid five-year rent for branches in Bolgatanga, Spintex, Tema, Sunyani and Tamale, but never opened them.

“These reasons, among others, informed exigent decisions to sell the bank which is now a drain on the national purse,” he said.

The group also urged all those who were not happy with the failed First Rand acquisition to commend the board and management of SSNIT for stopping the deal, which would have seen pensioners’ funds being doled out to the South African company.